MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--
Intuit Inc.
(Nasdaq: INTU) today announced financial results for the third quarter
of fiscal 2014, which ended April 30.

“Our momentum is building with our transition to the cloud, increasing
value for customers and for Intuit,” said Brad Smith, Intuit’s president
and chief executive officer. “Executing against our growth strategy we
delivered strong results across the board. We grew share in our tax
businesses, and our small business subscriber growth continues to
accelerate globally.”

Financial Highlights

Unless otherwise noted, all growth rates refer to the current period
versus the comparable prior-year period, and the business metrics and
associated growth rates refer to worldwide business metrics. During the
quarter, Intuit:

Intuit Chief Financial Officer Neil Williams commented on Intuit’s
business segment results for the quarter in prepared remarks for
investors.

“Thanks to a strong tax season, we exceeded our goals for customer
growth and also improved our year-to-date Consumer Group margin. I’m
pleased with our performance this year and we expect to continue to
invest in the product experience and to prioritize growth in share and
customers over the long term.”

Snapshot of Third-quarter Results

GAAP

Non-GAAP

Q3

FY14

Q3

FY13

Change

Q3

FY14

Q3

FY13

Change

Revenue

$2,388

$2,091

14%

$2,388

$2,091

14%

OperatingIncome

$1,494

$1,282

17%

$1,556

$1,337

16%

EPS

$3.39

$2.71

25%

$3.53

$2.94

20%

Dollars are in millions, except earnings per share (EPS). See “About
Non-GAAP Financial Measures” below for more information regarding
financial measures not prepared in accordance with Generally Accepted
Accounting Principles (GAAP). All figures in the table above have been
reclassified to reflect Intuit Websites, Intuit Financial Services, and
Intuit Health as discontinued operations and to exclude their results
from non-GAAP EPS.

Snapshot of Year-to-date Results

GAAP

Non-GAAP

YTD

FY14

YTD

FY13

Change

YTD

FY14

YTD

FY13

Change

Revenue

$3,792

$3,537

7%

$3,792

$3,537

7%

Operating

Income

$1,371

$1,293

6%

$1,553

$1,461

6%

EPS

$3.22

$2.89

11%

$3.49

$3.20

9%

Dollars are in millions, except earnings per share (EPS). See “About
Non-GAAP Financial Measures” below for more information regarding
financial measures not prepared in accordance with Generally Accepted
Accounting Principles (GAAP). All figures in the table above have been
reclassified to reflect Intuit Websites, Intuit Financial Services, and
Intuit Health as discontinued operations and to exclude their results
from non-GAAP EPS.

Capital Allocation Summary

Intuit repurchased $1.4 billion in shares during the first nine months
of fiscal 2014; over $2 billion remains on the current share
repurchase authorization.

The company also approved a quarterly cash dividend of $0.19 per
share, payable on July 18 to shareholders of record on July 10.

Forward-looking Guidance

Intuit updated guidance for full fiscal year 2014 and the fourth quarter
of fiscal 2014, both ending July 31.

For full fiscal year 2014 Intuit expects:

Revenue of $4.475 billion to $4.505 billion, growth of 7 to 8 percent.

GAAP operating income of $1.325 billion to $1.345 billion, growth of 7
to 9 percent.

Non-GAAP operating income of $1.580 billion to $1.600 billion, growth
of 7 to 9 percent.

GAAP diluted earnings per share of $3.08 to $3.12, growth of 9 to 10
percent.

Non-GAAP diluted EPS of $3.54 to $3.58, growth of 11 to 12 percent.

For the fourth quarter of fiscal 2014, Intuit expects:

Revenue of $683 million to $713 million.

GAAP operating loss of $26 million to $46 million.

Non-GAAP operating income of $27 million to $47 million.

GAAP loss per share of $0.10 to $0.12.

Non-GAAP diluted EPS of $0.06 to $0.08.

Conference Call Information

Intuit executives will discuss the financial results on a conference
call at 1:30 p.m. Pacific time on May 20. To hear the call, dial
866-875-5291 in the United States or 973-935-8702 from international
locations. No reservation or access code is needed. The conference call
can also be heard live at http://intuit2014.q4web.com/events/default.aspx.
Prepared remarks for the call will be available on Intuit’s website
after the call ends.

Replay Information

A replay of the conference call will be available for one week by
calling 888-266-2081, or 703-925-2533 from international locations. The
access code for this call is 1636923.

The audio webcast will remain available on Intuit’s website for one week
after the conference call.

About Intuit Inc.

Intuit Inc. creates business and
financial management solutions that simplify the business of life for
small businesses, consumers and accounting professionals.

Founded in 1983, Intuit had revenue of $4.2 billion in its fiscal year
2013. The company has approximately 8,000 employees with major offices
in the United States, Canada,
the United Kingdom, India and
other locations. More information can be found at www.intuit.com.

Intuit and the Intuit logo, among others, are registered trademarks
and/or registered service marks of Intuit Inc. in the United States and
other countries.

About Non-GAAP Financial Measures

This press release and the accompanying tables include non-GAAP
financial measures. For a description of these non-GAAP financial
measures, including the reasons management uses each measure, and
reconciliations of these non-GAAP financial measures to the most
directly comparable financial measures prepared in accordance with
Generally Accepted Accounting Principles, please see the section of the
accompanying tables titled "About Non-GAAP Financial Measures" as well
as the related Table B and Table E. A copy of the press release issued
by Intuit today can be found on the investor relations page of Intuit's
Web site.

Cautions About Forward-looking Statements

This press release contains forward-looking statements, including
forecasts of Intuit’s future expected financial results; expectations
regarding growth from connected services and from current or future
products and services; expectations regarding Intuit’s global strategy,
strategic outcomes, product launches and marketing campaigns and their
impacts on Intuit’s business; Intuit’s prospects for the business in
fiscal 2014; and all of the statements under the heading
“Forward-looking Guidance.”

Because these forward-looking statements involve risks and
uncertainties, there are important factors that could cause our actual
results to differ materially from the expectations expressed in the
forward-looking statements. These factors include, without limitation,
the following: inherent difficulty in predicting consumer behavior;
difficulties in receiving, processing, or filing customer tax
submissions; consumers may not respond as we expected to our advertising
and promotional activities; product introductions and price competition
from our competitors can have unpredictable negative effects on our
revenue, profitability and market position; governmental encroachment in
our tax businesses or other governmental activities or public policy
affecting the preparation and filing of tax returns could negatively
affect our operating results and market position; we may not be able to
successfully innovate and introduce new offerings and business models to
meet our growth and profitability objectives, and current and future
offerings may not adequately address customer needs and may not achieve
broad market acceptance, which could harm our operating results and
financial condition; business interruption or failure of our information
technology and communication systems may impair the availability of our
products and services, which may damage our reputation and harm our
future financial results; as we upgrade and consolidate our customer
facing applications and supporting information technology
infrastructure, any problems with these implementations could interfere
with our ability to deliver our offerings; any failure to properly use
and protect personal customer information and data could harm our
revenue, earnings and reputation; if we are unable to develop, manage
and maintain critical third party business relationships, our business
may be adversely affected; increased government regulation of our
businesses may harm our operating results; if we fail to process
transactions effectively or fail to adequately protect against potential
fraudulent activities, our revenue and earnings may be harmed; any
significant offering quality problems or delays in our offerings could
harm our revenue, earnings and reputation; our participation in the Free
File Alliance may result in lost revenue opportunities and
cannibalization of our traditional paid franchise; the continuing global
economic downturn may continue to impact consumer and small business
spending, financial institutions and tax filings, which could negatively
affect our revenue and profitability; year-over-year changes in the
total number of tax filings that are submitted to government agencies
due to economic conditions or otherwise may result in lost revenue
opportunities; our revenue and earnings are highly seasonal and the
timing of our revenue between quarters is difficult to predict, which
may cause significant quarterly fluctuations in our financial results;
our financial position may not make repurchasing shares advisable or we
may issue additional shares in an acquisition causing our number of
outstanding shares to grow; our inability to adequately protect our
intellectual property rights may weaken our competitive position and
reduce our revenue and earnings; our acquisition and divestiture
activities may disrupt our ongoing business, may involve increased
expenses and may present risks not contemplated at the time of the
transactions; our use of significant amounts of debt to finance
acquisitions or other activities could harm our financial condition and
results of operation; and litigation involving intellectual property,
antitrust, shareholder and other matters may increase our costs. More
details about these and other risks that may impact our business are
included in our Form 10-K for fiscal 2013 and in our other SEC filings.
You can locate these reports through our website at http://intuit2014.q4web.com.
Forward-looking statements are based on information as of May 20, 2014,
and we do not undertake any duty to update any forward-looking statement
or other information in these materials.

TABLE A

INTUIT INC.

GAAP CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

(Unaudited)

Three Months Ended

Nine Months Ended

April 30, 2014

April 30, 2013

April 30, 2014

April 30, 2013

Net revenue:

Product

$

735

$

638

$

1,251

$

1,267

Service and other

1,653

1,453

2,541

2,270

Total net revenue

2,388

2,091

3,792

3,537

Costs and expenses:

Cost of revenue:

Cost of product revenue

34

30

108

102

Cost of service and other revenue

130

110

363

334

Amortization of acquired technology

6

5

18

14

Selling and marketing

412

385

1,022

963

Research and development

186

166

548

503

General and administrative

121

106

348

307

Amortization of other acquired intangible assets

5

7

14

21

Total costs and expenses [A]

894

809

2,421

2,244

Operating income from continuing operations

1,494

1,282

1,371

1,293

Interest expense

(8

)

(8

)

(24

)

(23

)

Interest and other income, net

3

4

8

7

Income before income taxes

1,489

1,278

1,355

1,277

Income tax provision [B]

505

420

465

408

Net income from continuing operations

984

858

890

869

Net income (loss) from discontinued operations [C]

—

(36

)

46

5

Net income

$

984

$

822

$

936

$

874

Basic net income per share from continuing operations

$

3.47

$

2.89

$

3.12

$

2.93

Basic net income (loss) per share from discontinued operations

—

(0.12

)

0.16

0.02

Basic net income per share

$

3.47

$

2.77

$

3.28

$

2.95

Shares used in basic per share calculations

284

297

285

296

Diluted net income per share from continuing operations

$

3.39

$

2.83

$

3.06

$

2.87

Diluted net income (loss) per share from discontinued operations

—

(0.12

)

0.16

0.02

Diluted net income per share

$

3.39

$

2.71

$

3.22

$

2.89

Shares used in diluted per share calculations

290

304

291

303

Dividends declared per common share

$

0.19

$

0.17

$

0.57

$

0.51

See accompanying Notes.

INTUIT INC.NOTES TO TABLE A

[A]

The following table summarizes the total share-based compensation
expense that we recorded in operating income from continuing
operations for the periods shown.

Three Months Ended

Nine Months Ended

(in millions)

April 30,

2014

April 30,

2013

April 30,

2014

April 30,

2013

Cost of revenue

$

2

$

1

$

6

$

4

Selling and marketing

13

15

44

47

Research and development

16

13

46

39

General and administrative

18

14

52

43

Total share-based compensation expense

$

49

$

43

$

148

$

133

[B]

We compute our provision for or benefit from income taxes by
applying the estimated annual effective tax rate to income or loss
from recurring operations and adding the effects of any discrete
income tax items specific to the period.

Our effective tax rates for the three and nine months ended April
30, 2014 were approximately 34% and those tax rates did not differ
significantly from the federal statutory rate of 35%.

Our effective tax rate for the three months ended April 30, 2013 was
approximately 33% and did not differ significantly from the federal
statutory rate of 35%. Our effective tax rate for the nine months
ended April 30, 2013 was approximately 32%. Excluding discrete tax
items that included the retroactive effect of the reinstatement of
the research and experimentation credit as described above, our
effective tax rate for that period was approximately 34% and did not
differ significantly from the federal statutory rate of 35%.

[C]

On August 1, 2013 we completed the sale of our Intuit Financial
Services (IFS) business for approximately $1.025 billion in cash. We
recorded a gain on the disposal of IFS of approximately $36 million,
net of income taxes, in the first quarter of fiscal 2014.

On August 19, 2013 we completed the sale of our Intuit Health
business for cash consideration that was not significant and
recorded a loss on disposal that was offset by a related income tax
benefit of approximately $14 million, resulting in a net gain on
disposal of approximately $10 million in the first quarter of fiscal
2014.

On September 17, 2012 we sold our Intuit Websites business for
approximately $60 million in cash and recorded a gain on disposal of
approximately $32 million, net of income taxes.

We have reclassified our statements of operations for all periods
presented to reflect these three businesses as discontinued
operations. We have also segregated the net assets of IFS from
continuing operations on our balance sheet at July 31, 2013. The
net assets of Intuit Websites and Intuit Health were not
significant, so we have not segregated them from continuing
operations on our balance sheet at July 31, 2013. Because the cash
flows of our Intuit Websites, IFS, and Intuit Health discontinued
operations were not material for any period presented, we have not
segregated the cash flows of those businesses from continuing
operations on our statements of cash flows.

TABLE B

INTUIT INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES

(In millions, except per share amounts)

(Unaudited)

Three Months Ended

Nine Months Ended

April 30,

2014

April 30,

2013

April 30,

2014

April 30,

2013

GAAP operating income from continuing operations

$

1,494

$

1,282

$

1,371

$

1,293

Amortization of acquired technology

6

5

18

14

Amortization of other acquired intangible assets

5

7

14

21

Professional fees for business combinations

2

—

2

—

Share-based compensation expense

49

43

148

133

Non-GAAP operating income from continuing operations

$

1,556

$

1,337

$

1,553

$

1,461

GAAP net income

$

984

$

822

$

936

$

874

Amortization of acquired technology

6

5

18

14

Amortization of other acquired intangible assets

5

7

14

21

Professional fees for business combinations

2

—

2

—

Share-based compensation expense

49

43

148

133

Net gains on debt securities and other investments

1

—

—

1

Income tax effect of non-GAAP adjustments

(23

)

(20

)

(57

)

(69

)

Net income from discontinued operations

—

36

(46

)

(5

)

Non-GAAP net income

$

1,024

$

893

$

1,015

$

969

GAAP diluted net income per share

$

3.39

$

2.71

$

3.22

$

2.89

Amortization of acquired technology

0.02

0.02

0.06

0.05

Amortization of other acquired intangible assets

0.02

0.02

0.05

0.07

Professional fees for business combinations

0.01

—

0.01

—

Share-based compensation expense

0.17

0.14

0.51

0.44

Net gains on debt securities and other investments

—

—

—

—

Income tax effect of non-GAAP adjustments

(0.08

)

(0.07

)

(0.20

)

(0.23

)

Net income from discontinued operations

—

0.12

(0.16

)

(0.02

)

Non-GAAP diluted net income per share

$

3.53

$

2.94

$

3.49

$

3.20

Shares used in diluted per share calculation

290

304

291

303

See “About Non-GAAP Financial Measures” immediately following Table
E for information on these measures, the items excluded from the
most directly comparable GAAP measures in arriving at non-GAAP
financial measures, and the reasons management uses each measure and
excludes the specified amounts in arriving at each non-GAAP
financial measure.

TABLE C

INTUIT INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

April 30,

2014

July 31,

2013

ASSETS

Current assets:

Cash and cash equivalents

$

1,574

$

1,009

Investments

1,059

652

Accounts receivable, net

277

130

Income taxes receivable

2

62

Deferred income taxes

137

166

Prepaid expenses and other current assets

116

98

Current assets of discontinued operations

—

44

Current assets before funds held for customers

3,165

2,161

Funds held for customers

273

235

Total current assets

3,438

2,396

Long-term investments

31

83

Property and equipment, net

566

555

Goodwill

1,313

1,246

Acquired intangible assets, net

155

149

Other assets

107

102

Long-term assets of discontinued operations

—

955

Total assets

$

5,610

$

5,486

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

193

$

137

Accrued compensation and related liabilities

215

218

Deferred revenue

499

495

Income taxes payable

277

2

Other current liabilities

226

154

Current liabilities of discontinued operations

—

39

Current liabilities before customer fund deposits

1,410

1,045

Customer fund deposits

273

235

Total current liabilities

1,683

1,280

Long-term debt

499

499

Other long-term obligations

190

167

Long-term obligations of discontinued operations

—

9

Total liabilities

2,372

1,955

Stockholders’ equity

3,238

3,531

Total liabilities and stockholders’ equity

$

5,610

$

5,486

TABLE D

INTUIT INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Nine Months Ended

April 30,

2014

April 30,

2013

Cash flows from operating activities:

Net income

$

936

$

874

Adjustments to reconcile net income to net cash provided by
operating activities:

See “About Non-GAAP Financial Measures” immediately following this
Table E for information on these measures, the items excluded from
the most directly comparable GAAP measures in arriving at non-GAAP
financial measures, and the reasons management uses each measure and
excludes the specified amounts in arriving at each non-GAAP
financial measure.

[a]

Reflects estimated adjustments for share-based compensation expense
of approximately $61 million, amortization of acquired technology of
approximately $7 million, amortization of other acquired intangible
assets of approximately $5 million.

[b]

Reflects the estimated adjustments in item [a] and income taxes
related to these adjustments.

[c]

Reflects estimated adjustments for share-based compensation expense
of approximately $211 million; amortization of acquired technology
of approximately $25 million; and amortization of other acquired
intangible assets of approximately $19 million.

[d]

Reflects the estimated adjustments in item [c], income taxes related
to these adjustments, and the net gain on discontinued operations of
$46 million.

Non-GAAP financial measures should not be considered as a substitute
for, or superior to, measures of financial performance prepared in
accordance with GAAP. These non-GAAP financial measures do not reflect a
comprehensive system of accounting, differ from GAAP measures with the
same names and may differ from non-GAAP financial measures with the same
or similar names that are used by other companies.

We compute non-GAAP financial measures using the same consistent method
from quarter to quarter and year to year. We may consider whether other
significant items that arise in the future should be excluded from our
non-GAAP financial measures.

We exclude the following items from all of our non-GAAP financial
measures:

Share-based compensation expense

Amortization of acquired technology

Amortization of other acquired intangible assets

Goodwill and intangible asset impairment charges

Professional fees for business combinations

We also exclude the following items from non-GAAP net income (loss) and
diluted net income (loss) per share:

Gains and losses on debt and equity securities and other investments

Income tax effects of excluded items

Discontinued operations

We believe that these non-GAAP financial measures provide meaningful
supplemental information regarding Intuit’s operating results primarily
because they exclude amounts that we do not consider part of ongoing
operating results when planning and forecasting and when assessing the
performance of the organization, our individual operating segments or
our senior management. Segment managers are not held accountable for
share-based compensation expense, amortization, or the other excluded
items and, accordingly, we exclude these amounts from our measures of
segment performance. We believe that our non-GAAP financial measures
also facilitate the comparison by management and investors of results
for current periods and guidance for future periods with results for
past periods.

The following are descriptions of the items we exclude from our non-GAAP
financial measures.

Share-based compensation expenses. These consist of non-cash
expenses for stock options, restricted stock units and our Employee
Stock Purchase Plan. When considering the impact of equity awards, we
place greater emphasis on overall shareholder dilution rather than the
accounting charges associated with those awards.

Amortization of acquired technology and amortization of other
acquired intangible assets. When we acquire an entity, we are
required by GAAP to record the fair values of the intangible assets of
the entity and amortize them over their useful lives. Amortization of
acquired technology in cost of revenue includes amortization of software
and other technology assets of acquired entities. Amortization of other
acquired intangible assets in operating expenses includes amortization
of assets such as customer lists, covenants not to compete and trade
names.

Goodwill and intangible asset impairment charges. We exclude from
our non-GAAP financial measures non-cash charges to adjust the carrying
values of goodwill and other acquired intangible assets to their
estimated fair values.

Professional fees for business combinations. We exclude from our
non-GAAP financial measures the professional fees we incur to complete
business combinations. These include investment banking, legal and
accounting fees.

Gains and losses on debt and equity securities and other investments.
We exclude from our non-GAAP financial measures gains and losses that we
record when we sell or impair available-for-sale debt and equity
securities and other investments.

Income tax effects of excluded items and certain discrete tax items.
We exclude from our non-GAAP financial measures the income tax effects
of the items described above, as well as income tax effects related to
business combinations. In addition, the effects of one-time income tax
adjustments recorded in a specific quarter for GAAP purposes are
reflected on a forecasted basis in our non-GAAP financial measures. This
is consistent with how we plan, forecast and evaluate our operating
results.

Operating results and gains and losses on the sale of discontinued
operations. From time to time, we sell or otherwise dispose of
selected operations as we adjust our portfolio of businesses to meet our
strategic goals. In accordance with GAAP, we segregate the operating
results of discontinued operations as well as gains and losses on the
sale of these discontinued operations from continuing operations on our
GAAP statements of operations but continue to include them in GAAP net
income or loss and net income or loss per share. We exclude these
amounts from our non-GAAP financial measures.

The reconciliations of the forward-looking non-GAAP financial measures
to the most directly comparable GAAP financial measures in Table E
include all information reasonably available to Intuit at the date of
this press release. These tables include adjustments that we can
reasonably predict. Events that could cause the reconciliation to change
include acquisitions and divestitures of businesses, goodwill and other
asset impairments, and sales of available-for-sale debt securities and
other investments.